News:
February 20, 2024
The Minister of Employment and Labour Relations, Hon. Ignatius Baffour Awuah, is set to meet key stakeholders in the pension industry regarding the refund of outstanding 4% Tier 2 contributions to the Social Security and National Insurance Trust (SSNIT).
The discussion is expected to begin this month. Indeed, the 2022 Auditor-General’s report highlighted SSNIT’s inability to fully retrieve the 4% contributions from the Tier 2 Fund Managers. These fund managers were entrusted with managing the funds on behalf of contributors following the enactment of the National Pension Act, 2008 (Act 766).
This came to light when the Director-General of SSNIT, Dr. John Ofori-Tenkorang, appeared before the Public Accounts Committee (PAC) of Parliament today to answer questions relating to the findings raised by the Auditor-General in its 2022 reports.
With the enactment of the National Pensions Amendment Act, 2014 (Act 883), a total of 105,124 contributors from both public and private sectors had already made contributions to SSNIT. These contributors, whose 4% contributions were managed by private fund managers, are now retired and receiving full pensions from SSNIT.
As of the beginning of 2021, the fund managers owed SSNIT GH¢483,365,156.60. However, only GH¢6,076,705.05 was received by SSNIT in 2021, leaving an amount of GH¢477,288,451.55 yet to be retrieved from the fund managers.
Dr. Ofori-Tenkorang noted that the Trust is making significant progress to retrieve all outstanding funds owed SSNIT.
Appointment of Auditors for subsidiaries
The Auditor-General’s report further indicated that 10 sampled subsidiaries of the Trust appointed their own auditors to audit their financial statements contrary to Article 187 of the 1992 Constitution and Regulation 204 of the Public Financial Management Regulations, 2019 (L.I. 2378).
In his response, Dr. Ofori-Tenkorang stated that the Trust’s subsidiaries operate as independent limited liability companies in accordance with the Companies Act, 2019 (Act 992) with powers to appoint their auditors.
“Pursuant to the Companies Act, it is the Board of Directors of the company that has the mandate to appoint auditors on behalf of the shareholders. We have communicated this legal opinion in writing to the Auditor-General and we are waiting for a formal response”, he added.
However, the Auditor-General disagreed with the SSNIT DG’s position, prompting the Chairman of the Committee, Mr. James Klutse Avedzi, to intervene accordingly and resolve the matter.
“The Auditor-General audits the public accounts of Ghana and the same Auditor-General audits the accounts of Public Boards, Corporations and other Statutory Institutions. So, per that provision in the Constitution, the Auditor-General audits the accounts of SSNIT”.
“Now, SSNIT owns a company, which is a limited liability company governed by the Companies Act. So directly, the Auditor-General cannot audit that private company. So whatever decision is taken, (by the company) it’s incorporated into SSNIT’s accounts which is audited by the Auditor-General. So, there is no need for the Auditor-General to audit the subsidiaries”, Mr. Klutse Adedzi clarified.
Overpayment of Advance Mobilisation
Regarding the advance payments of 15% contract sum threshold as stipulated in the Public Financial Management Regulations, 2019 (L.I. 2378), the Deputy Director-General of SSNIT, in charge of Investment and Development, Mr. Kofi Bosompem Osafo-Maafo, noted that the Trust accepts the recommendations.
He added that Management has put in measures to ensure that subsequent payments do not exceed 15% of the contract sum threshold.
The Chairman of the Committee enquired from the auditors if they were satisfied with the response provided by SSNIT and the representatives of the Auditor-General acknowledged that they were satisfied with the response.
Need to increase investible funds to the Treasury Sub-Asset Portfolio
The Auditor-General in its report advised SSNIT’s Management to increase the investment outlay in the Treasury Sub-Asset Portfolio to surge its liquidity reserve to support the Trust.
The Chairman of the Committee, Mr. Klutse Avedzi sought to know whether SSNIT has complied with this recommendations from the Auditor-General.
In his response, the Director-General of SSNIT said “the recommendation is well taken. The only reason we have fallen below threshold happened in years where we have not received adequate contributions. But we are committed to ensuring we have healthy liquid treasury portfolio that will solve the liquidity ratio problem”.
Ghanamps.com